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| [1] | United States Supreme Court |
| [2] | No. 98-1109 |
| [3] | 120 S.Ct. 1084, 2000.SCT.0042047 <http://www.versuslaw.com>,
00 Cal. Daily Op. Serv. 1533 |
| [4] | February 29, 2000 |
| [5] | DONNA E. SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL., PETITIONERS
V. ILLINOIS COUNCIL ON LONG TERM CARE, INC. |
| [6] | SYLLABUS BY THE COURT |
| [7] | OCTOBER TERM, 1999 |
| [8] | SHALALA v. ILLINOIS COUNCIL ON LONGTERM CARE, INC. |
| [9] | NOTE: Where it is feasible, a syllabus (headnote) will be released, as
is being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. |
| [10] | SUPREME COURT OF THE UNITED STATES |
| [11] | SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES, et al. v. ILLINOIS COUNCIL
ON LONG TERM CARE, INC. |
| [12] | Certiorari To The United States Court Of Appeals For The Seventh Circuit |
| [13] | No. 98-1109. |
| [14] | Argued November 8, 1999 |
| [15] | Decided February 29, 2000 |
| [16] | Under the Medicare Act's special review provisions, a nursing home that
is "dissatisfied ... with a determination described in subsection (b)(2)"
is "entitled to a hearing . . . to the same extent as is provided in" the
Social Security Act, 42 U. S. C. §405(b), "and to judicial review of
the Secretary's final decision after such hearing as is provided in section
405(g) ... ." 42 U. S. C. §1395cc(h)(1) (emphasis added). The cross-referenced
subsection (b)(2) gives petitioner Secretary of Health and Human Services
(HHS) power to terminate a provider agreement with a home where, for example,
she determines that a home has failed to comply substantially with the statute
and the regulations. The cross-referenced §405(b) describes the administrative
hearing to which a "dissatisfied" home is entitled, and the cross-referenced
§405(g) provides that the home may obtain federal district court review
of the Secretary's "final decision ... made after a hearing ... ." Section
405(h), a provision of the Social Security Act incorporated into the Medicare
Act by 42 U. S. C. §1395ii, provides that "[n]o action ... to recover
on any claim arising under" the Medicare laws shall be "brought under [28
U. S. C. §]1331." It channels most, if not all, Medicare claims through
this special review system. Respondent, the Illinois Council on Long Term
Care, Inc. (Council), an association of nursing homes, did not rely on these
provisions when it filed suit against, inter alios, petitioners (hereinafter
Secretary), challenging the validity of Medicare regulations that impose
sanctions or remedies on nursing homes that violate certain substantive
standards. Rather, it invoked federal-question jurisdiction, 28 U. S. C.
§1331. In dismissing for lack of jurisdiction, the Federal District
Court found that 42 U. S. C. §405(h), as interpreted in Weinberger
v. Salfi, 422 U. S. 749, and Heckler v. Ringer, 466 U. S. 602, barred a
§1331 suit. The Seventh Circuit reversed, holding that Bowen v. Michigan
Academy of Family Physicians, 476 U. S. 667, had significantly modified
such earlier case law. |
| [17] | Held: Section 405(h), as incorporated by §1395ii, bars federal-question
jurisdiction here. Pp. 6-21. |
| [18] | (a) Section 405(h) purports to make exclusive §405(g)'s judicial
review method. While its "to recover on any claim arising under" language
plainly bars §1331 review where an individual challenges on any legal
ground the agency's denial of a monetary benefit under the Social Security
and Medicare Acts, the question here is whether an anticipatory challenge
to the lawfulness of a policy, regulation, or statute that might later bar
recovery or authorize imposition of a penalty is also an action "to recover
on any claim arising under" those Acts. Pp. 6-7. |
| [19] | (b) Were the Court not to take account of Michigan Academy, §405(h),
as interpreted in Salfi and Ringer, would clearly bar this §1331 lawsuit.
The Court found in the latter cases that §405(h) applies where "both
the standing and the substantive basis for the presentation" of a claim
is the Social Security Act, Salfi, supra, at 760-761, or the Medicare Act,
Ringer, 466 U. S., at 615. All aspects of a present or future benefits claim
must be channeled though the administrative process. Id., at 621-622. As
so interpreted, §405(h)'s bar reaches beyond ordinary administrative
law principles of "ripeness" and "exhaustion of administrative remedies"
-- doctrines that normally require channeling a legal challenge through
the agency -- by preventing the application of exceptions to those doctrines.
This nearly absolute channeling requirement assures the agency greater opportunity
to apply, interpret, or revise policies, regulations, or statutes without
possibly premature interference by individual courts applying "ripeness"
and "exhaustion" exceptions case by case. The assurance comes at the price
of occasional individual, delay-related hardship, but paying such a price
in the context of a massive, complex health and safety program such as Medicare
was justified in the judgment of Congress as understood in Salfi and Ringer.
Salfi and Ringer cannot be distinguished from the instant case. They themselves
foreclose distinctions based upon the "potential future" versus "actual
present" nature of the claim, the "general legal" versus the "fact-specific"
nature of the challenge, the "collateral" versus the "non-collateral" nature
of the issues, or the "declaratory" versus "injunctive" nature of the relief
sought. Nor can the Court accept a distinction that limits §405(h)'s
scope to claims for monetary benefits or that involve "amounts," as neither
the language nor the purposes of §405 support such a distinction. Neither
McNary v. Haitian Refugee Center, Inc., 498 U. S. 479, nor Mathews v. Eldridge,
424 U. S. 319, supports the Council's effort to distinguish Salfi and Ringer.
The Court's approval of a §1331 suit against the Immigration and Naturalization
Service in McNary rested on the different language of the immigration statute.
And Eldridge was a case in which the respondent had complied with, not disregarded,
the Social Security Act's special review procedures -- specifically the
non-waivable and nonexcusable requirement that an individual present a claim
to the agency before raising it in court. The upshot is that the Council's
argument must rest primarily upon Michigan Academy. Pp. 7-12. |
| [20] | (c) Michigan Academy did not, contrary to the Court of Appeals' holding,
modify the Court's earlier holdings by limiting §405(h)'s scope, as
incorporated by §1395ii, to "amount determinations." That case involved
the lawfulness of HHS regulations governing procedures used to calculate
Medicare Part B benefits; and the Medicare statute, as it then existed,
did not provide for §405(g) review of such decisions. The Court ruled
that this silence did not itself foreclose §1331 review. In response
to the argument that §405(h) barred §1331 review, the Court declined
to pass in the abstract on the meaning of §405(h) because that section
was made applicable to the Medicare Act "to the same extent as" it is applicable
to the Social Security Act by virtue of 42 U. S. C. §1395ii. The Court
interpreted that phrase to foreclose application of §405(h) where its
application would preclude judicial review rather than channeling it through
the agency. As limited by the Court of Appeals, Michigan Academy would have
overturned or dramatically limited earlier precedents such as Salfi and
Ringer, and would have created a hardly justifiable distinction between
"amount determinations" and many similar HHS determinations. This Court
does not normally overturn, or so dramatically limit, earlier authority
sub silentio, and it did not do so here. Pp. 12-17. |
| [21] | (d) The Council's argument that it falls within the Michigan Academy exception
because it can obtain no review at all unless it can obtain §1331 review
is unconvincing. It argues that review is available only after the Secretary
terminates a home's provider agreement. But in her brief and regulations,
the Secretary offers a legally permissible interpretation of the statute:
that it permits a dissatisfied nursing home to have an administrative hearing
on a determination that it has failed to comply substantially with the statute,
agreements, or regulations, whether termination or some other remedy is
imposed. See, e.g., Chevron U. S. A. Inc. v. Natural Resources Defense Council,
Inc., 467 U. S. 837, 843. The Secretary also denies that she engages in
any practice that forces a home to submit a corrective plan and sacrifice
appeal rights in order to avoid termination, or that penalizes more severely
a home that chooses to appeal. Because the Council offers no convincing
reason to doubt her description of the agency's practice, the Court need
not decide whether a practice that forced homes to abandon legitimate challenges
could amount to the practical equivalent of a total denial of judicial review.
If, as the Council argues, the regulations unlawfully limit the extent to
which the agency will provide the administrative review channel leading
to judicial review, its members remain free, after following the special
review route, to contest in court the lawfulness of the relevant regulation
or statute. That is true even if the agency does not or cannot resolve the
particular contention, because it is the "action" arising under the Medicare
Act that must be channeled through the agency. The Council finally argues
that, as an association speaking on behalf of its injured members, it has
no standing to take advantage of the special review channel. However, it
is the members' rights to review that are at stake, and the statutes creating
the special review channel adequately protect those rights. Pp. 17-21. |
| [22] | 143 F. 3d 1072, reversed. |
| [23] | Breyer, J., delivered the opinion of the Court, in which Rehnquist, C.
J., and O'Connor, Souter, and Ginsburg, JJ., joined. Stevens, J., and Scalia,
J., filed dissenting opinions. Thomas, J., filed a dissenting opinion, in
which Stevens and Kennedy, JJ., joined, and in which Scalia, J., joined
except as to Part III. |
| [24] | Court Below: 143 F. 3d 1072. |
| [25] | Jeffrey A. Lamken argued the cause for petitioners. With him on the briefs
were Solicitor General Waxman, Acting Assistant Attorney General Ogden,
Deputy Solicitor General Kneedler, Barbara C. Biddle, Jeffrey Clair, Harriet
S. Rabb, and Jeffrey Golland. Kimball R. Anderson argued the cause for respondent.
With him on the brief were Charles P. Sheets, Bruce R. Braun, and Brian
E. Neuffer. Briefs of amici curiae urging affirmance were filed for the
American Association of Homes and Services for the Aging by Mark H. Gallant;
for the American Health Care Association et al. by Thomas C. Fox and Harvey
M. Tettlebaum; for the American Hospital Association by Charles G. Curtis,
Jr., and Edward J. Green; and for the American Medical Association et al.
by Paul M. Smith, Robert M. Portman, Michael L. Ile, Leonard A. Nelson,
Richard N. Peterson, Ann E. Allen, Stuart M. Gerson, Saul J. Morse and Robert
J. Kane. |
| [26] | The opinion of the court was delivered by: Justice Breyer |
| [27] | Opinion of the Court |
| [28] | SHALALA v. ILLINOIS COUNCIL ON LONGTERM CARE, INC. |
| [29] | ____ U. S. ____ (2000) |
| [30] | On Writ Of Certiorari To The United States Court Of Appeals For The Seventh
Circuit |
| [31] | The question before us is one of jurisdiction. An association of nursing
homes sued, inter alios, the Secretary of Health and Human Services (HHS)
and another federal party (hereinafter Secretary) in Federal District Court
claiming that certain Medicare-related regulations violated various statutes
and the Constitution. The association invoked the court's federal-question
jurisdiction, 28 U. S. C. §1331. The District Court dismissed the suit
on the ground that it lacked jurisdiction. It believed that a set of special
statutory provisions creates a separate, virtually exclusive, system of
administrative and judicial review for denials of Medicare claims; and it
held that one of those provisions explicitly barred a §1331 suit. See
42 U. S. C. §1395ii (incorporating to the Medicare Act 42 U. S. C.
§405(h), which provides that "[n]o action ... to recover on any claim"
arising under the Medicare laws shall be "brought under section 1331 ...
of title 28"). The Court of Appeals, however, reversed. |
| [32] | We conclude that the statutory provision at issue, §405(h), as incorporated
by §1395ii, bars federal-question jurisdiction here. The association
or its members must proceed instead through the special review channel that
the Medicare statutes create. See 42 U. S. C. §1395cc(h); §1395cc(b)(2)(A);
§1395ii; §§405(b), (g), (h). |
| [33] | I. |
| [34] | A. |
| [35] | We begin by describing the regulations that the association's lawsuit
attacks. Medicare Act Part A provides payment to nursing homes which provide
care to Medicare beneficiaries after a stay in hospital. To receive payment,
a home must enter into a provider agreement with the Secretary of HHS, and
it must comply with numerous statutory and regulatory requirements. State
and federal agencies enforce those requirements through inspections. Inspectors
report violations, called "deficiencies." And "deficiencies" lead to the
imposition of sanctions or "remedies." See generally §§1395i-3,
1395cc. |
| [36] | The regulations at issue focus on the imposition of sanctions or remedies.
They were promulgated in 1994, 59 Fed. Reg. 56116, pursuant to a 1987 law
that tightened the substantive standards that Medicare (and Medicaid) imposed
upon nursing homes and that significantly broadened the Secretary's authority
to impose remedies upon violators. Omnibus Budget Reconciliation Act of
1987, §§4201-4218, 101 Stat. 1330-160 to 1330-221 (codified as
amended at 42 U. S. C. §1395i-3 (1994 ed. and Supp. III)). |
| [37] | The remedial regulations (and a related manual) in effect tell Medicare-administering
agencies how to impose remedies after inspectors find that a nursing home
has violated substantive standards. They divide a nursing home's deficiencies
into three categories of seriousness depending upon a deficiency's severity,
its prevalence at the home, its relation with other deficiencies, and the
home's compliance history. Within each category they list a set of remedies
that the agency may, or must, impose. Where, for example, deficiencies "immediately
jeopardize the health or safety of ... residents," the Secretary must terminate
the home's provider agreement or appoint new, temporary management. Where
deficiencies are less serious, the Secretary may impose lesser remedies,
such as civil penalties, transfer of residents, denial of some or all payment,
state monitoring, and the like. Where a nursing home, though deficient in
some respects, is in "[s]ubstantial compliance," i.e., where its deficiencies
do no more than create a "potential for causing minimal harm," the Secretary
will impose no sanction or remedy at all. See generally 42 U. S. C. §1395i-3(h);
42 CFR §488.301 (1998); §488.400 et seq.; App. 54, 66 (Manual).
The statute and regulations also create various review procedures. 42 U.
S. C. §§1395cc(b)(2)(A), (h); 42 CFR §431.151 et seq. (1998);
§488.408(g); 42 CFR pt. 498 (1998). |
| [38] | The association's complaint filed in Federal District Court attacked the
regulations as unlawful in four basic ways. In its view: (1) certain terms,
e.g., "substantial compliance" and "minimal harm," are unconstitutionally
vague; (2) the regulations and manual, particularly as implemented, violate
statutory requirements seeking enforcement consistency, 42 U. S. C. §1395i-3(g)(2)(D),
and exceed the legislative mandate of the Medicare Act; (3) the regulations
create administrative procedures inconsistent with the Federal Constitution's
Due Process Clause; and (4) the manual and other agency publications create
legislative rules that were not promulgated consistent with the Administrative
Procedure Act's demands for "notice and comment" and a statement of "basis
and purpose," 5 U. S. C. §553. See App. 18-19, 27-38, 43-49 (Amended
Complaint). |
| [39] | B. |
| [40] | We next describe the two competing jurisdictional routes through which
the association arguably might seek to mount its legal attack. The route
it has followed, federal-question jurisdiction, is set forth in 28 U. S.
C. §1331, which simply states that "district courts shall have original
jurisdiction of all civil actions arising under the Constitution, laws,
or treaties of the United States." The route that it did not follow, the
special Medicare review route, is set forth in a complex set of statutory
provisions, which must be read together. See Appendix, infra. The Medicare
Act says that a home |
| [41] | "dissatisfied ... with a determination described in subsection (b)(2)
... shall be entitled to a hearing ... to the same extent as is provided
in [the Social Security Act, 42 U. S. C. §]405(b) ... and to judicial
review of the Secretary's final decision after such hearing as is provided
in section 405(g) ... ." 42 U. S. C. §1395cc(h)(1) (emphasis added). |
| [42] | The cross-referenced subsection (b)(2) gives the Secretary power to terminate
an agreement where, for example, the Secretary |
| [43] | "has determined that the provider fails to comply substantially with the
provisions [of the Medicare Act] and regulations thereunder ... ." §1395cc(b)(2)(A)
(emphasis added). |
| [44] | The cross-referenced §405(b) describes the nature of the administrative
hearing to which the Medicare Act entitles a home that is "dissatisfied"
with the Secretary's "determination." The cross-referenced §405(g)
provides that a "dissatisfied" home may obtain judicial review in federal
district court of "any final decision of the [Secretary] made after a hearing
... ." Separate statutes provide for administrative and judicial review
of civil monetary penalty assessments. §1395i-3(h)(2)(B)(ii); §§1320a-7a(c)(2),
(e). |
| [45] | A related Social Security Act provision, 42 U. S. C. §405(h), channels
most, if not all, Medicare claims, through this special review system. It
says: |
| [46] | "(h) Finality of [Secretary's] decision. |
| [47] | "The findings and decision of the [Secretary] after a hearing shall be
binding upon all individuals who were parties to such hearing. No findings
of fact or decision of the [Secretary] shall be reviewed by any person,
tribunal, or governmental agency except as herein provided. No action against
the United States, the [Secretary], or any officer or employee thereof shall
be brought under section 1331 or 1346 [federal defendant jurisdiction] of
title 28 to recover on any claim arising under this subchapter." (Emphasis
added.) |
| [48] | Title 42 U. S. C. §1395ii makes §405(h) applicable to the Medicare
Act "to the same extent as" it applies to the Social Security Act. |
| [49] | C. |
| [50] | The case before us began when the Illinois Council on Long Term Care,
Inc. (Council), an association of about 200 Illinois nursing homes participating
in the Medicare (or Medicaid) program, filed the complaint we have described,
supra, at 3, in Federal District Court. (Medicaid is not at issue in this
Court.) The District Court, as we have said, dismissed the complaint for
lack of federal-question jurisdiction. No. 96 C 2953 (ND Ill., Mar. 31,
1997), App. to Pet. for Cert. 13a, 15a. In doing so, the court relied upon
§405(h) as interpreted by this Court in Weinberger v. Salfi, 422 U.
S. 749 (1975), and Heckler v. Ringer, 466 U. S. 602 (1984). App to Pet.
for Cert. 15a-19a. |
| [51] | The Court of Appeals reversed the dismissal. 143 F. 3d 1072 (CA7 1998).
In its view, a later case, Bowen v. Michigan Academy of Family Physicians,
476 U. S. 667 (1986), had significantly modified this Court's earlier case
law. Other Circuits have understood Michigan Academy differently. See Michigan
Assn. of Homes and Servs. for the Aging v. Shalala, 127 F. 3d 496, 500-501
(CA6 1997); American Academy of Dermatology v. HHS, 118 F. 3d 1495, 1499-1501
(CA11 1997); St. Francis Medical Center v. Shalala, 32 F. 3d 805, 812-813
(CA3 1994), cert. denied, 514 U. S. 1016 (1995); Farkas v. Blue Cross &
Blue Shield, 24 F. 3d 853, 855-860 (CA6 1994); Abbey v. Sullivan, 978 F.
2d 37, 41-44 (CA2 1992); National Kidney Patients Assn. v. Sullivan, 958
F. 2d 1127, 1130-1134 (CADC 1992), cert. denied, 506 U. S. 1049 (1993).
We granted certiorari to resolve those differences. |
| [52] | II. |
| [53] | Section 405(h) purports to make exclusive the judicial review method set
forth in §405(g). Its second sentence says that "[n]o findings of fact
or decision of the [Secretary] shall be reviewed by any person, tribunal,
or governmental agency except as herein provided." §405(h). Its third
sentence, directly at issue here, says that "[n]o action against the United
States, the [Secretary], or any officer or employee thereof shall be brought
under section 1331 or 1346 of title 28 to recover on any claim arising under
this subchapter." (Emphasis added.) |
| [54] | The scope of the italicized language "to recover on any claim arising
under" the Social Security (or, as incorporated through §1395ii, the
Medicare) Act is, if read alone, uncertain. Those words clearly apply in
a typical Social Security or Medicare benefits case, where an individual
seeks a monetary benefit from the agency (say a disability payment, or payment
for some medical procedure), the agency denies the benefit and the individual
challenges the lawfulness of that denial. The statute plainly bars §1331
review in such a case, irrespective of whether the individual challenges
the agency's denial on evidentiary, rule-related, statutory, constitutional,
or other legal grounds. But does the statute's bar apply when one who might
later seek money or some other benefit from (or contest the imposition of
a penalty by) the agency challenges in advance (in a §1331 action)
the lawfulness of a policy, regulation, or statute that might later bar
recovery of that benefit (or authorize the imposition of the penalty)? Suppose,
as here, a group of such individuals, needing advance knowledge for planning
purposes, together bring a §1331 action challenging such a rule or
regulation on general legal grounds. Is such an action one "to recover on
any claim arising under" the Social Security or Medicare Acts? That, in
effect, is the question before us. |
| [55] | III. |
| [56] | In answering the question, we temporarily put the case on which the Court
of Appeals relied, Michigan Academy, supra, to the side. Were we not to
take account of that case, §405(h) as interpreted by the Court's earlier
cases of Weinberger v. Salfi, supra, and Heckler v. Ringer, supra, would
clearly bar this §1331 lawsuit. |
| [57] | In Salfi, a mother and a daughter, filing on behalf of themselves and
a class of individuals, brought a §1331 action challenging the constitutionality
of a statutory provision that, if valid, would deny them Social Security
benefits. See 42 U. S. C. §§416(c)(5), (e)(2) (imposing a duration-of-relationship
Social Security eligibility requirement for surviving wives and stepchildren
of deceased wage earners). The mother and daughter had appeared before the
agency but had not completed its processes. The class presumably included
some who had, and some who had not, appeared before the agency; the complaint
did not say. This Court held that §405(h) barred §1331 jurisdiction
for all members of the class because "it is the Social Security Act which
provides both the standing and the substantive basis for the presentation
of th[e] constitutional contentions." Salfi, supra, at 760-761. The Court
added that the bar applies "irrespective of whether resort to judicial processes
is necessitated by discretionary decisions of the Secretary or by his non-discretionary
application of allegedly unconstitutional statutory restrictions." 422 U.
S., at 762. It also pointed out that the bar did not "preclude constitutional
challenges," but simply "require[d] that they be brought" under the same
"jurisdictional grants" and "in conformity with the same standards" applicable
"to non-constitutional claims arising under the Act." Ibid. |
| [58] | We concede that the Court also pointed to certain special features of
the case not present here. The plaintiff class had asked for relief that
included a direction to the Secretary to pay Social Security benefits to
those entitled to them but for the challenged provision. See id., at 761.
And the Court thought this fact helped make clear that the action arose
"under the Act whose benefits [were] sought." Ibid. But in a later case,
Ringer, the Court reached a similar result despite the absence of any request
for such relief. See 466 U. S., at 616, 623. |
| [59] | In Ringer, four individuals brought a §1331 action challenging the
lawfulness (under statutes and the Constitution) of the agency's determination
not to provide Medicare Part A reimbursement to those who had undergone
a particular medical operation. The Court held that §405(h) barred
§1331 jurisdiction over the action, even though the challenge was in
part to the agency's procedures, the relief requested amounted simply to
a declaration of invalidity (not an order requiring payment), and one plaintiff
had as yet no valid claim for reimbursement because he had not even undergone
the operation and would likely never do so unless a court set aside as unlawful
the challenged agency "no reimbursement" determination. See id., at 614-616,
621-623. The Court reiterated that §405(h) applies where "both the
standing and the substantive basis for the presentation" of a claim is the
Medicare Act, id., at 615 (quoting Salfi, 422 U. S., at 760-761) (internal
quotation marks omitted), adding that a "claim for future benefits" is a
§405(h) "claim," 466 U. S., at 621-622, and that "all aspects" of any
such present or future claim must be "channeled" through the administrative
process, id., at 614. See also Your Home Visiting Nurse Services, Inc. v.
Shalala, 525 U. S. 449, 456 (1999); Califano v. Sanders, 430 U. S. 99, 103-104,
n. 3 (1977). |
| [60] | As so interpreted, the bar of §405(h) reaches beyond ordinary administrative
law principles of "ripeness" and "exhaustion of administrative remedies,"
see Salfi, supra, at 757 -- doctrines that in any event normally require
channeling a legal challenge through the agency. See Abbott Laboratories
v. Gardner, 387 U. S. 136, 148-149 (1967) (ripeness); McKart v. United States,
395 U. S. 185, 193-196 (1969) (exhaustion). Indeed, in this very case, the
Seventh Circuit held that several of respondent's claims were not ripe and
remanded for ripeness review of the remainder. 143 F. 3d, at 1077-1078.
Doctrines of "ripeness" and "exhaustion" contain exceptions, however, which
exceptions permit early review when, for example, the legal question is
"fit" for resolution and delay means hardship, see Abbott Laboratories,
supra, at 148-149, or when exhaustion would prove "futile," see McCarthy
v. Madigan, 503 U. S. 140, 147-148 (1992); McKart, supra, at 197-201. (And
sometimes Congress expressly authorizes pre-enforcement review, though not
here. See, e.g., 15 U. S. C. §2618(a)(1)(A) (Toxic Substances Control
Act).) |
| [61] | Insofar as §405(h) prevents application of the "ripeness" and "exhaustion"
exceptions, i.e., insofar as it demands the "channeling" of virtually all
legal attacks through the agency, it assures the agency greater opportunity
to apply, interpret, or revise policies, regulations, or statutes without
possibly premature interference by different individual courts applying
"ripeness" and "exhaustion" exceptions case by case. But this assurance
comes at a price, namely, occasional individual, delay-related hardship.
In the context of a massive, complex health and safety program such as Medicare,
embodied in hundreds of pages of statutes and thousands of pages of often
interrelated regulations, any of which may become the subject of a legal
challenge in any of several different courts, paying this price may seem
justified. In any event, such was the judgment of Congress as understood
in Salfi and Ringer. See Ringer, 466 U. S., at 627; Salfi, supra, at 762. |
| [62] | Despite the urging of the Council and supporting amici, we cannot distinguish
Salfi and Ringer from the case before us. Those cases themselves foreclose
distinctions based upon the "potential future" versus the "actual present"
nature of the claim, the "general legal" versus the "fact-specific" nature
of the challenge, the "collateral" versus "non-collateral" nature of the
issues, or the "declaratory" versus "injunctive" nature of the relief sought.
Nor can we accept a distinction that limits the scope of §405(h) to
claims for monetary benefits. Claims for money, claims for other benefits,
claims of program eligibility, and claims that contest a sanction or remedy
may all similarly rest upon individual fact-related circumstances, may all
similarly dispute agency policy determinations, or may all similarly involve
the application, interpretation, or constitutionality of interrelated regulations
or statutory provisions. There is no reason to distinguish among them in
terms of the language or in terms of the purposes of §405(h). Section
1395ii's blanket incorporation of that provision into the Medicare Act as
a whole certainly contains no such distinction. Nor for similar reasons
can we here limit those provisions to claims that involve "amounts." |
| [63] | The Council cites two other cases in support of its efforts to distinguish
Salfi and Ringer: McNary v. Haitian Refugee Center, Inc., 498 U. S. 479
(1991), and Mathews v. Eldridge, 424 U. S. 319 (1976). In Haitian Refugee
Center, the Court held permissible a §1331 challenge to "a group of
decisions or a practice or procedure employed in making decisions" despite
an immigration statute that barred §1331 challenges to any Immigration
and Naturalization Service " `determination respecting an application for
adjustment of status' " under the Special Agricultural Workers' program.
498 U. S., at 491-498. Haitian Refugee Center's outcome, however, turned
on the different language of that different statute. Indeed, the Court suggested
that statutory language similar to the language at issue here -- any claim
"arising under" the Medicare or Social Security Acts, §405(h) -- would
have led it to a different legal conclusion. See id., at 494 (using as an
example a statute precluding review of " `all causes ... arising under any
of' " the immigration statutes). |
| [64] | In Eldridge, the Court held permissible a District Court lawsuit challenging
the constitutionality of agency procedures authorizing termination of Social
Security disability payments without a pretermination hearing. See 424 U.
S., at 326-332. Eldridge, however, is a case in which the Court found that
the respondent had followed the special review procedures set forth in §405(g),
thereby complying with, rather than disregarding, the strictures of §405(h).
See id., at 326-327 (holding jurisdiction available only under §405(g)).
The Court characterized the constitutional issue the respondent raised as
"collateral" to his claim for benefits, but it did so as a basis for requiring
the agency to excuse, where the agency would not do so on its own, see Salfi,
422 U. S., at 766-767, some (but not all) of the procedural steps set forth
in §405(g). 424 U. S., at 329-332 (identifying collateral nature of
the claim and irreparable injury as reasons to excuse §405(g)'s exhaustion
requirements); see also Bowen v. City of New York, 476 U. S. 467, 483-485
(1986) (noting that Eldridge factors are not to be mechanically applied).
The Court nonetheless held that §405(g) contains the non-waivable and
nonexcusable requirement that an individual present a claim to the agency
before raising it in court. See Ringer, supra, at 622; Eldridge, supra,
at 329; Salfi, supra, at 763-764. The Council has not done so here, and
thus cannot establish jurisdiction under §405(g). |
| [65] | The upshot is that without Michigan Academy the Council cannot win. Its
precedent-based argument must rest primarily upon that case. |
| [66] | IV. |
| [67] | The Court of Appeals held that Michigan Academy modified the Court's earlier
holdings by limiting the scope of "1395ii and therefore §405(h)" to
"amount determinations." 143 F. 3d, at 1075-1076. But we do not agree. Michigan
Academy involved a §1331 suit challenging the lawfulness of HHS regulations
that governed procedures used to calculate benefits under Medicare Part
B -- which Part provides voluntary supplementary medical insurance, e.g.,
for doctors' fees. See Michigan Academy, 476 U. S., at 674-675; United States
v. Erika, Inc., 456 U. S. 201, 202-203 (1982). The Medicare statute, as
it then existed, provided for only limited review of Part B decisions. It
allowed the equivalent of §405(g) review for "eligibility" determinations.
See 42 U. S. C. §1395ff(b) (1)(B) (1982 ed.). It required private insurance
carriers (administering the Part B program) to provide a "fair hearing"
for disputes about Part B "amount determinations." §1395u(b)(3)(C).
But that was all. |
| [68] | Michigan Academy first discussed the statute's total silence about review
of "challenges mounted against the method by which . . . amounts are to
be determined." 476 U. S., at 675. It held that this silence meant that,
although review was not available under §405(g), the silence did not
itself foreclose other forms of review, say review in a court action brought
under §1331. See id., at 674-678. Cf. Erika, supra, at 208 (holding
that the Medicare Part B statute's explicit reference to carrier hearings
for amount disputes does foreclose all further agency or court review of
"amount determinations"). |
| [69] | The Court then asked whether §405(h) barred 28 U. S. C. §1331
review of challenges to methodology. Noting the Secretary's Salfi/Ringer-based
argument that §405(h) barred §1331 review of all challenges arising
under the Medicare Act and the respondents' counter-argument that §405(h)
barred challenges to "methods" only where §405(g) review was available,
see Michigan Academy, 476 U. S., at 679, the Court wrote: |
| [70] | "Whichever may be the better reading of Salfi and Ringer, we need not
pass on the meaning of §405(h) in the abstract to resolve this case.
Section 405(h) does not apply on its own terms to Part B of the Medicare
program, but is instead incorporated mutatis mutandis by §1395ii. The
legislative history of both the statute establishing the Medicare program
and the 1972 amendments thereto provides specific evidence of Congress'
intent to foreclose review only of `amount determinations' -- i.e., those
[matters] ... remitted finally and exclusively to adjudication by private
insurance carriers in a `fair hearing.' By the same token, matters which
Congress did not delegate to private carriers, such as challenges to the
validity of the Secretary's instructions and regulations, are cognizable
in courts of law." Id., at 680 (footnote omitted). |
| [71] | The Court's words do not limit the scope of §405(h) itself to instances
where a plaintiff, invoking §1331, seeks review of an "amount determination."
Rather, the Court said that it would "not pass on the meaning of §405(h)
in the abstract." Ibid. (emphasis added). Instead it focused upon the Medicare
Act's cross-referencing provision, §1395ii, which makes §405(h)
applicable "to the same extent as" it is "applicable" to the Social Security
Act. (Emphasis added). It interpreted that phrase as applying §405(h)
"mutatis mutandis," i.e., "[a]ll necessary changes having been made." Black's
Law Dictionary 1039 (7th ed. 1999). And it applied §1395ii with one
important change of detail -- a change produced by not applying §405(h)
where its application to a particular category of cases, such as Medicare
Part B "methodology" challenges, would not lead to a channeling of review
through the agency, but would mean no review at all. The Court added that
a " `serious constitutional question' ... would arise if we construed §1395ii
to deny a judicial forum for constitutional claims arising under Part B."
476 U. S., at 681, n. 12 (quoting Salfi, 422 U. S., at 762 (citing Johnson
v. Robison, 415 U. S. 361, 366-367 (1974))). |
| [72] | More than that: Were the Court of Appeals correct in believing that Michigan
Academy limited the scope of §405(h) itself to "amount determinations,"
that case would have significantly affected not only Medicare Part B cases
but cases arising under the Social Security Act and Medicare Part A as well.
It accordingly would have overturned or dramatically limited this Court's
earlier precedents, such as Salfi and Ringer, which involved, respectively,
those programs. It would, moreover, have created a hardly justifiable distinction
between "amount determinations" and many other similar HHS determinations,
see supra, at 10. And we do not understand why Congress, as Justice Stevens
believes, post, at 1-2 (dissenting opinion), would have wanted to compel
Medicare patients, but not Medicare providers, to channel their claims through
the agency. Cf. Brief for Respondent 7-8, 18-21, 30-31 (apparently conceding
the point). This Court does not normally overturn, or so dramatically limit,
earlier authority sub silentio. And we agree with those Circuits that have
held the Court did not do so in this instance. See Michigan Assn. of Homes
and Servs., 127 F. 3d, at 500-501; American Academy of Dermatology, 118
F. 3d, at 1499-1501; St. Francis Medical Center, 32 F. 3d, at 812; Farkas,
24 F. 3d, at 855-861; Abbey, 978 F. 2d, at 41-44; National Kidney Patients
Assn., 958 F. 2d, at 1130-1134. |
| [73] | Justice Thomas maintains that Michigan Academy "must have established,"
by way of a new interpretation of §1395ii, the critical distinction
between a dispute about an agency determination in a particular case and
a more general dispute about, for example, the agency's authority to promulgate
a set of regulations, i.e, the very distinction that this Court's earlier
cases deny. Post, at 7 (dissenting opinion). He says that, in this respect
we have mistaken Michigan Academy's "reasoning" (the presumption against
preclusion of judicial review) for its "holding." Post, at 8-9. And, he
finds the holding consistent with earlier cases such as Ringer because,
he says, in Ringer everyone simply assumed without argument that §1395ii's
channeling provision fully incorporated the whole of §405(h). Post,
at 9-10. |
| [74] | For one thing, the language to which Justice Thomas points simply says
that "Congres[s] inten[ded] to foreclose review only of `amount determinations'
" and not "matters which Congress did not delegate to private carriers,
such as challenges to the validity of the Secretary's instructions and regulations,"
Michigan Academy, supra, at 680 (emphasis added). That language refers to
particular features of the Medicare Part B program -- "private carriers"
and "amount determinations" -- which are not here before us. And its reference
to "foreclosure" of review quite obviously cannot be taken to refer to §1395ii
because, as we have explained, §1395ii is a channeling requirement,
not a foreclosure provision -- of "amount determinations" or anything else.
In short, it is difficult to reconcile Justice Thomas' characterization
of Michigan Academy as a holding that §1395ii is "trigger[ed]" only
by "challenges to ... particular determinations," post, at 9, with the Michigan
Academy language to which he points. |
| [75] | Regardless, it is more plausible to read Michigan Academy as holding that
§1395ii does not apply §405(h) where application of §405(h)
would not simply channel review through the agency, but would mean no review
at all. And contrary to Justice Scalia's suggestion, post, at 1 (dissenting
opinion), that single rule applies to Medicare Part A as much as to Medicare
Part B. This latter holding, as we have said, has the virtues of consistency
with Michigan Academy's actual language; consistency with the holdings of
earlier cases such as Ringer; and consistency with the distinction that
this Court has often drawn between a total preclusion of review and postponement
of review. See, e.g., Salfi, supra, at 762 (distinguishing §405(h)'s
channeling requirement from the complete preclusion of judicial review at
issue in Robison, supra, at 373); Thunder Basin Coal Co. v. Reich, 510 U.
S. 200, 207, n. 8 (1994) (strong presumption against preclusion of review
is not implicated by provision postponing review); Haitian Refugee Center,
498 U. S., at 496-499 (distinguishing between Ringer and Michigan Academy
and finding the case governed by the latter because the statute precluded
all meaningful judicial review). Justice Thomas refers to an "antichanneling"
presumption (a "presumption in favor of preenforcement review," post, at
15-16). But any such presumption must be far weaker than a presumption against
preclusion of all review in light of the traditional ripeness doctrine,
which often requires initial presentation of a claim to an agency. As we
have said, supra, at 9-10, Congress may well have concluded that a universal
obligation to present a legal claim first to HHS, though postponing review
in some cases, would produce speedier, as well as better, review overall.
And this Court crossed the relevant bridge long ago when it held that Congress,
in both the Social Security Act and the Medicare Act, insisted upon an initial
presentation of the matter to the agency. Ringer, 466 U. S., at 627; Salfi,
supra, at 762. Michigan Academy does not require that we reconsider that
longstanding interpretation. |
| [76] | V. |
| [77] | The Council argues that in any event it falls within the exception that
Michigan Academy creates, for here as there, it can obtain no review at
all unless it can obtain judicial review in a §1331 action. In other
words, the Council contends that application of §1395ii's channeling
provision to the portion of the Medicare statute and the Medicare regulations
at issue in this case will amount to the "practical equivalent of a total
denial of judicial review." Haitian Refugee Center, supra, at 497. The Council,
however, has not convinced us that is so. |
| [78] | The Council says that the special review channel that the Medicare statutes
create applies only where the Secretary terminates a home's provider agreement;
it is not available in the more usual case involving imposition of a lesser
remedy, say the transfer of patients, the withholding of payments, or the
imposition of a civil monetary penalty. |
| [79] | We have set forth the relevant provisions above, supra at 4-5; Appendix,
infra. The specific judicial review provision, §405(g), authorizes
judicial review of "any final decision of the [Secretary] made after a [§405(b)]
hearing." A further relevant provision, §1395cc(h)(1), authorizes a
§405(b) hearing whenever a home is "dissatisfied ... with a determination
described in subsection (b)(2)." (Emphasis added.) And subsection (b)(2)
authorizes the Secretary to terminate an agreement, whenever she "has determined
that the provider fails to comply substantially with" statutes, agreements,
or "regulations." §1395cc(b)(2)(A) (emphasis added). |
| [80] | The Secretary states in her brief that the relevant "determination" that
entitles a "dissatisfied" home to review is any determination that a provider
has failed to comply substantially with the statute, agreements, or regulations,
whether termination or "some other remedy is imposed." Reply Brief for Petitioners
14 (emphasis added). The Secretary's regulations make clear that she so
interprets the statute. See 42 CFR §§498.3(b)(12), 498.1(a)-(b)(1998).
The statute's language, though not free of ambiguity, bears that interpretation.
And we are aware of no convincing countervailing argument. We conclude that
the Secretary's interpretation is legally permissible. See Chevron U. S.
A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 843 (1984);
Your Home Visiting Nurse Services, 525 U. S., at 453; see also 42 U. S.
C. §1395i3h(2)(B)(ii) (providing a different channel for administrative
and judicial review of decisions imposing civil monetary penalties.) |
| [81] | The Council next argues that the regulations, as implemented by the enforcement
agencies, deny review in practice by (1) insisting that a nursing home with
deficiencies present a corrective plan, (2) imposing no further sanction
or remedy if it does so, but (3) threatening termination if it does not.
See 42 CFR §§488.402(d), 488.456(b)(ii) (1998). Because a home
cannot risk termination, the Council adds, it must always submit a plan,
thereby avoiding imposition of a remedy, but simultaneously losing its opportunity
to contest the lawfulness of any remedy-related rules or regulations. See
§498.3(b)(12). And, the Council's amici assert, compliance actually
harms the home by subjecting it to increased sanctions later on by virtue
of the unreviewed deficiency findings, and because the agency makes deficiency
findings public on the Internet, §488.325. |
| [82] | The short, conclusive answer to these contentions is that the Secretary
denies any such practice. She states in her brief that a nursing home with
deficiencies can test the lawfulness of her regulations simply by refusing
to submit a plan and incurring a minor penalty. Minor penalties, she says,
are the norm, for "terminations from the program are rare and generally
reserved for the most egregious recidivist institutions." Reply Brief for
Petitioners 18; ibid. (HHS reports that only 25 out of more than 13,000
nursing homes were terminated in 1995-1996). She adds that the "remedy imposed
on a facility that fails to submit a plan of correction or to correct a
deficiency -- and appeals the deficiency -- is no different than the remedy
the Secretary ordinarily would impose in the first instance." Ibid. Nor
do the regulations "cause providers to suffer more severe penalties in later
enforcement actions based on findings that are unreviewable." Ibid. The
Secretary concedes that a home's deficiencies are posted on the Internet,
but she notes that a home can post a reply. See id., at 20, n. 20. |
| [83] | The Council gives us no convincing reason to doubt the Secretary's description
of the agency's general practice. We therefore need not decide whether a
general agency practice that forced nursing homes to abandon legitimate
challenges to agency regulations could amount to the "practical equivalent
of a total denial of judicial review," Haitian Refugee Center, 498 U. S.,
at 497. Contrary to what Justice Thomas says, post, at 11-12, 20-21, we
do not hold that an individual party could circumvent §1395ii's channeling
requirement simply because that party shows that postponement would mean
added inconvenience or cost in an isolated, particular case. Rather, the
question is whether, as applied generally to those covered by a particular
statutory provision, hardship likely found in many cases turns what appears
to be simply a channeling requirement into complete preclusion of judicial
review. See Haitian Refugee Center, supra, at 496-497. Of course, individual
hardship may be mitigated in a different way, namely, through excusing a
number of the steps in the agency process, though not the step of presentment
of the matter to the agency. See supra, at 11-12; infra, at 20-21. But again,
the Council has not shown anything other than potentially isolated instances
of the inconveniences sometimes associated with the postponement of judicial
review. |
| [84] | The Council complains that a host of procedural regulations unlawfully
limit the extent to which the agency itself will provide the administrative
review channel leading to judicial review, for example, regulations insulating
from review decisions about a home's level of noncompliance or a determination
to impose one, rather than another, penalty. See 42 CFR §§431.153(b),
488.408(g)(2), 498.3(d)(10)(ii)(1998). The Council's members remain free,
however, after following the special review route that the statutes prescribe,
to contest in court the lawfulness of any regulation or statute upon which
an agency determination depends. The fact that the agency might not provide
a hearing for that particular contention, or may lack the power to provide
one, see Sanders, 430 U. S., at 109 ("Constitutional questions obviously
are unsuited to resolution in administrative hearing procedures ..."); Salfi,
422 U. S., at 764; Brief for Petitioners 45, is beside the point because
it is the "action" arising under the Medicare Act that must be channeled
through the agency. See Salfi, supra, at 762. After the action has been
so channeled, the court will consider the contention when it later reviews
the action. And a court reviewing an agency determination under §405(g)
has adequate authority to resolve any statutory or constitutional contention
that the agency does not, or cannot, decide, see Thunder Basin Coal, 510
U. S., at 215, and n. 20; Haitian Refugee Center, supra, at 494; Ringer,
466 U. S., at 617; Salfi, supra, at 762, including, where necessary, the
authority to develop an evidentiary record. |
| [85] | Proceeding through the agency in this way provides the agency the opportunity
to reconsider its policies, interpretations, and regulations in light of
those challenges. Nor need it waste time, for the agency can waive many
of the procedural steps set forth in §405(g), see Salfi, supra, at
767, and a court can deem them waived in certain circumstances, see Eldridge,
424 U. S., at 330-331, even though the agency technically holds no "hearing"
on the claim. See Salfi, supra, at 763-767 (holding that Secretary's decision
not to challenge the sufficiency of the appellees' exhaustion was in effect
a determination that the agency had rendered a "final decision" within the
meaning of §405(g)); Eldridge, supra, at 331-332, and n. 11 (invoking
practical conception of finality to conclude that collateral nature of claim
and potential irreparable injury from delayed review satisfy the "final
decision" requirement of §405(g)). At a minimum, however, the matter
must be presented to the agency prior to review in a federal court. This
the Council has not done. |
| [86] | Finally, the Council argues that, because it is an association, not an
individual, it cannot take advantage of the special review channel, for
the statute authorizes review through that channel only at the request of
a "dissatisfied" "institution or agency." §1395cc(h)(1). The Council
speaks only on behalf of its member institutions, and thus has standing
only because of the injury those members allegedly suffer. See Arizonans
for Official English v. Arizona, 520 U. S. 43, 65-66 (1997); Hunt v. Washington
State Apple Advertising Comm'n, 432 U. S. 333, 343 (1977). It is essentially
their rights to review that are at stake. And the statutes that create the
special review channel adequately protect those rights. |
| [87] | VI. |
| [88] | For these reasons, this case cannot fit within Michigan Academy's exception.
The bar of §405(h) applies. The judgment of the Court of Appeals is |
| [89] | Reversed. |
| [90] | APPENDIX TO THE OPINION OF THE COURT |
| [91] | 42 U. S. C. §1395cc(h)(1) provides: |
| [92] | "(h) Dissatisfaction with determination of Secretary; appeal by institutions
or agencies; single notice and hearing |
| [93] | "(1) Except as provided in paragraph (2), an institution or agency dissatisfied
with a determination by the Secretary that it is not a provider of services
or with a determination described in subsection (b)(2) of this section shall
be entitled to a hearing thereon by the Secretary (after reasonable notice)
to the same extent as is provided in section 405(b) of this title, and to
judicial review of the Secretary's final decision after such hearing as
is provided in section 405(g) of this title, except that, in so applying
such sections and in applying section 405(l) of this title thereto, any
reference therein to the Commissioner of Social Security or the Social Security
Administration shall be considered a reference to the Secretary or the Department
of Health and Human Services, respectively." |
| [94] | 42 U. S. C. §1395cc(b) provides, in relevant part: |
| [95] | "(b) Termination or non-renewal of agreements |
| [96] | "(2) The Secretary may refuse to enter into an agreement under this section
or, upon such reasonable notice to the provider and the public as may be
specified in regulations, may refuse to renew or may terminate such an agreement
after the Secretary -- |
| [97] | "(A) has determined that the provider fails to comply substantially with
the provisions of the agreement, with the provisions of this subchapter
and regulations thereunder, or with a corrective action required under section
1395ww(f)(2)(B) of this title." |
| [98] | 42 U. S. C. §405(b) provides, in relevant part |
| [99] | "(b) Administrative determination of entitlement to benefits; findings
of fact; hearings; investigations; evidentiary hearings in reconsiderations
of disability benefit terminations; subsequent applications |
| [100] | "(1) The Commissioner of Social Security is directed to make findings
of fact, and decisions as to the rights of any individual applying for a
payment under this subchapter. Any such decision by the Commissioner of
Social Security which involves a determination of disability and which is
in whole or in part unfavorable to such individual shall contain a statement
of the case, in understandable language, setting forth a discussion of the
evidence, and stating the Commissioner's determination and the reason or
reasons upon which it is based. Upon request by any such individual or upon
request by a wife, divorced wife, widow, surviving divorced wife, surviving
divorced mother, surviving divorced father, husband, divorced husband, widower,
surviving divorced husband, child, or parent who makes a showing in writing
that his or her rights may be prejudiced by any decision the Commissioner
of Social Security has rendered, the Commissioner shall give such applicant
and such other individual reasonable notice and opportunity for a hearing
with respect to such decision, and, if a hearing is held, shall, on the
basis of evidence adduced at the hearing, affirm, modify, or reverse the
Commissioner's findings of fact and such decision. Any such request with
respect to such a decision must be filed within sixty days after notice
of such decision is received by the individual making such request. The
Commissioner of Social Security is further authorized, on the Commissioner's
own motion, to hold such hearings and to conduct such investigations and
other proceedings as the Commissioner may deem necessary or proper for the
administration of this subchapter. In the course of any hearing, investigation,
or other proceeding, the Commissioner may administer oaths and affirmations,
examine witnesses, and receive evidence. Evidence may be received at any
hearing before the Commissioner of Social Security even though inadmissible
under rules of evidence applicable to court procedure. |
| [101] | "(3)(A) A failure to timely request review of an initial adverse determination
with respect to an application for any benefit under this subchapter or
an adverse determination on reconsideration of such an initial determination
shall not serve as a basis for denial of a subsequent application for any
benefit under this subchapter if the applicant demonstrates that the applicant,
or any other individual referred to in paragraph (1), failed to so request
such a review acting in good faith reliance upon incorrect, incomplete,
or misleading information, relating to the consequences of reapplying for
benefits in lieu of seeking review of an adverse determination, provided
by any officer or employee of the Social Security Administration or any
State agency acting under section 421 of this title. |
| [102] | "(B) In any notice of an adverse determination with respect to which a
review may be requested under paragraph (1), the Commissioner of Social
Security shall describe in clear and specific language the effect on possible
entitlement to benefits under this subchapter of choosing to reapply in
lieu of requesting review of the determination." |
| [103] | 42 U. S. C. §405(g) provides: |
| [104] | "(g) Judicial review |
| [105] | "Any individual, after any final decision of the Commissioner of Social
Security made after a hearing to which he was a party, irrespective of the
amount in controversy, may obtain a review of such decision by a civil action
commenced within sixty days after the mailing to him of notice of such decision
or within such further time as the Commissioner of Social Security may allow.
Such action shall be brought in the district court of the United States
for the judicial district in which the plaintiff resides, or has his principal
place of business, or, if he does not reside or have his principal place
of business within any such judicial district, in the United States District
Court for the District of Columbia. As part of the Commissioner's answer
the Commissioner of Social Security shall file a certified copy of the transcript
of the record including the evidence upon which the findings and decision
complained of are based. The court shall have power to enter, upon the pleadings
and transcript of the record, a judgment affirming, modifying, or reversing
the decision of the Commissioner of Social Security, with or without remanding
the cause for a rehearing. The findings of the Commissioner of Social Security
as to any fact, if supported by substantial evidence, shall be conclusive,
and where a claim has been denied by the Commissioner of Social Security
or a decision is rendered under subsection (b) of this section which is
adverse to an individual who was a party to the hearing before the Commissioner
of Social Security, because of failure of the claimant or such individual
to submit proof in conformity with any regulation prescribed under subsection
(a) of this section, the court shall review only the question of conformity
with such regulations and the validity of such regulations. The court may,
on motion of the Commissioner of Social Security made for good cause shown
before the Commissioner files the Commissioner's answer, remand the case
to the Commissioner of Social Security for further action by the Commissioner
of Social Security, and it may at any time order additional evidence to
be taken before the Commissioner of Social Security, but only upon a showing
that there is new evidence which is material and that there is good cause
for the failure to incorporate such evidence into the record in a prior
proceeding; and the Commissioner of Social Security shall, after the case
is remanded, and after hearing such additional evidence if so ordered, modify
or affirm the Commissioner's findings of fact or the Commissioner's decision,
or both, and shall file with the court any such additional and modified
findings of fact and decision, and a transcript of the additional record
and testimony upon which the Commissioner's action in modifying or affirming
was based. Such additional or modified findings of fact and decision shall
be reviewable only to the extent provided for review of the original findings
of fact and decision. The judgment of the court shall be final except that
it shall be subject to review in the same manner as a judgment in other
civil actions. Any action instituted in accordance with this subsection
shall survive notwithstanding any change in the person occupying the office
of Commissioner of Social Security or any vacancy in such office." |
| [106] | 42 U. S. C. §405(h) provides: |
| [107] | "(h) Finality of Commissioner's decision |
| [108] | "The findings and decision of the Commissioner of Social Security after
a hearing shall be binding upon all individuals who were parties to such
hearing. No findings of fact or decision of the Commissioner of Social Security
shall be reviewed by any person, tribunal, or governmental agency except
as herein provided. No action against the United States, the Commissioner
of Social Security, or any officer or employee thereof shall be brought
under section 1331 or 1346 of title 28 to recover on any claim arising under
this subchapter." |
| [109] | 42 U. S. C. §1395ii provides: |
| [110] | "The provisions of sections 406 and 416(j) of this title, and of subsections
(a), (d), (e), (h), (i), (j), (k), and (l) of section 405 of this title,
shall also apply with respect to this subchapter to the same extent as they
are applicable with respect to subchapter II of this chapter, except that,
in applying such provisions with respect to this subchapter, any reference
therein to the Commissioner of Social Security or the Social Security Administration
shall be considered a reference to the Secretary or the Department of Health
and Human Services, respectively." |
| [111] | 28 U. S. C. §1331 provides: |
| [112] | "Federal question. The district courts shall have original jurisdiction
of all civil actions arising under the Constitution, laws, or treaties of
the United States." |
| [113] | Stevens, J., dissenting |
| [114] | SHALALA v. ILLINOIS COUNCIL ON LONGTERM CARE, INC. |
| [115] | ____ U. S. ____ (2000) |
| [116] | SUPREME COURT OF THE UNITED STATES |
| [117] | No. 98-1109 |
| [118] | DONNA E. SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES, et al., PETITIONERS
v. ILLINOIS COUNCIL ON LONG TERM CARE, INC. |
| [119] | on writ of certiorari to the united states court of appeals for the seventh
circuit |
| [120] | [February 29, 2000] |
| [121] | Justice Stevens, dissenting. |
| [122] | While I join Justice Thomas' lucid dissent without qualification, I think
it worthwhile to identify a significant distinction between cases like Weinberger
v. Salfi, 442 U. S. 749 (1975) and Heckler v. Ringer, 466 U. S. 602 (1984),
on the one hand, and cases like Bowen v. Michigan Academy of Family Physicians,
476 U. S. 667 (1986), and this case, on the other hand. In the former group,
the issue concerned the plaintiffs' entitlement to benefits; in the latter
two, the issue concerns providers' eligibility for reimbursement. The distinction
between those two types of issues mirrors a critical distinction between
the Social Security Act, 42 U. S. C. §405, and the Medicare Act, 42
U. S. C. §1395ii. |
| [123] | Disputed claims for Social Security benefits always present a simple two-party
dispute in which the claimant is seeking a monetary benefit from the Government.
A proceeding under §405 is correctly described as an action "to recover
on any claim arising under this subchapter." 42 U. S. C. §405(h). Disputed
claims under the Medicare Act, however, typically involve three parties
-- the patient, the provider, and the Secretary. When the issue involves
a dispute over the patient's entitlement to benefits, it is fairly characterized
as an action "to recover" on a claim that is parallel to a claim for Social
Security benefits. The language in §1395ii that makes §405(h)
applicable to the Medicare Act "to the same extent as" it applies to the
Social Security Act thus encompasses claims by patients, but does not necessarily
encompass providers' challenges to the Secretary's regulations. |
| [124] | In Ringer, the Court, in effect (and, in my view, erroneously), treated
the patients' claim as a premature action "to recover" benefits that was
subject to the strictures in §405(h). See Ringer, 466 U. S., at 620.
But in this case, as in Michigan Academy, the plaintiffs are providers,
not patients. Their challenges to the Secretary's regulations simply do
not fall within the "to recover" language of §405(h) that was obviously
drafted to describe pecuniary claims. The incorporation of that language
into the Medicare Act via §1395ii provides no textual support for the
Court's decision today. Moreover, contrary to the Court's "Pandora's box"
rhetoric, ante, at 14, adherence to the plain meaning of "to recover" would
not make it necessary for the Court to revisit any of its earlier cases.
For this reason, as well as the reasons set forth by Justice Thomas, I find
nothing in the relevant statutory text that should be construed to bar this
action. |
| [125] | Scalia, J., dissenting |
| [126] | SHALALA v. ILLINOIS COUNCIL ON LONGTERM CARE, INC. |
| [127] | ____ U. S. ____ (2000) |
| [128] | SUPREME COURT OF THE UNITED STATES |
| [129] | No. 98-1109 |
| [130] | DONNA E. SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES, et al., PETITIONERS
v. ILLINOIS COUNCIL ON LONG TERM CARE, INC. |
| [131] | on writ of certiorari to the united states court of appeals for the seventh
circuit |
| [132] | [February 29, 2000] |
| [133] | Justice Scalia, dissenting. |
| [134] | I join the opinion of Justice Thomas except for Part III, and think it
necessary to add a few words in explanation of that vote: I am doubtful
whether Bowen v. Michigan Academy of Family Physicians, 476 U. S. 667 (1986),
was correctly decided, but that case being on the books, and involving as
it does a question of statutory interpretation, I believe it requires affirmance
here. There is in my view neither any basis for holding that 42 U. S. C.
§1395ii has a different meaning with regard to Part A than with regard
to Part B, nor (since repeals by implication are disfavored) any basis for
holding that the subsequent addition of a judicial-review provision distantly
related to §1395ii altered the meaning we had authoritatively pronounced.
See post, at 7, n. 7 (Thomas, J., dissenting). |
| [135] | I do not join Part III of Justice Thomas's opinion because its reliance
upon what it calls the presumption of preenforcement review suggests that
Michigan Academy was (a fortiori) correctly decided. I might have thought,
as an original matter, that the categorical language of §1395ii and
§405(h) overcame even what Justice Thomas acknowledges is the stronger
presumption of some judicial review. See post, at 14. With regard to the
timing of review, I would not even use the word "presumption" (a term which
Abbott Laboratories v. Gardner, 387 U. S. 136 (1967), applies only to the
preference for judicial review at some point, see id., at 140) since that
suggests that some unusually clear statement is required by way of negation.
In my view, preenforcement review is better described as the background
rule, which can be displaced by any reasonable implication ("persuasive
reason to believe," as Abbott Laboratories put it, ibid.) from the statute. |
| [136] | Thomas, J., dissenting |
| [137] | SHALALA v. ILLINOIS COUNCIL ON LONGTERM CARE, INC. |
| [138] | ____ U. S. ____ (2000) |
| [139] | SUPREME COURT OF THE UNITED STATES |
| [140] | No. 98-1109 |
| [141] | DONNA E. SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES, et al., PETITIONERS
v. ILLINOIS COUNCIL ON LONG TERM CARE, INC. |
| [142] | on writ of certiorari to the united states court of appeals for the seventh
circuit |
| [143] | [February 29, 2000] |
| [144] | Justice Thomas, with whom Justice Stevens and Justice Kennedy join, and
with whom Justice Scalia joins except as to Part III, dissenting. |
| [145] | Unlike the majority, I take no position on how 42 U. S. C. §405(h)
applies to respondent's suit. That section is beside the point in this case
because it does not apply of its own force to the Medicare Act, but only
by virtue of 42 U. S. C. §1395ii, the Medicare Act's incorporating
reference to §405(h).*fn1
I read Bowen v. Michigan Academy of Family Physicians, 476 U. S. 667 (1986),
to hold that this incorporating reference is triggered when a particular
fact-bound determination is in dispute, but not in the case, as here, of
a "challeng[e] to the validity of the Secretary's instructions and regulations."
Id., at 680. Though this (or any) interpretation of §1395ii is not
entirely free from doubt in light of the arguable tension between Michigan
Academy and our earlier decision in Heckler v. Ringer, 466 U. S. 602 (1984),
I would resolve such doubt by following our longstanding presumption in
favor of preenforcement judicial review. Accordingly, I would hold that
§405(h) does not apply to respondent's challenge, and therefore does
not preclude respondent from bringing suit under general federal-question
jurisdiction, 28 U. S. C. §1331. |
| [146] | I. |
| [147] | A. |
| [148] | Michigan Academy was the first time we discussed the meaning of §1395ii.
In earlier Medicare Act cases where the plaintiffs had sought to proceed
under general federal-question jurisdiction, we either had no need to address
§1395ii, or assumed in passing (and without discussion) that §1395ii
always incorporates §405(h). |
| [149] | Our decision in United States v. Erika, Inc., 456 U. S. 201 (1982), involved
the former situation. We dealt there with a Part B dispute over the appropriate
amount of reimbursement for certain medical supplies.*fn2
The statute provided for the determination of benefit amounts to be made
by a private insurance carrier designated by the Secretary, and authorized
de novo review of the initial determination by another officer designated
by the carrier. Id., at 203 (citing 42 U. S. C. §1395u (1982 ed.)).
But the statutory scheme did not mention the possibility of judicial review
of Part B benefit amount determinations, much less review by the Secretary.
By contrast, the statute did expressly provide for administrative review
by the Secretary and judicial review in two instances: disputes concerning
the claimant's eligibility for benefits under Part A or Part B, and disputes
over benefit amount determinations under Part A. 456 U. S., at 207 (citing
42 U. S. C.§1395ff (1982 ed.)). We found this contrast illuminating:
"In the context of the statute's precisely drawn provisions, this omission
provides persuasive evidence that Congress deliberately intended to foreclose
further review of [Part B benefit amount determinations]." 456 U. S., at
208.*fn3
The inference was strong enough that we had no need to discuss the Government's
alternative contention that §405(h) expressly precluded a claim under
general jurisdictional provisions. See id., at 206, n. 6. We therefore had
no occasion to decide whether §1395ii even incorporates §405(h)
into the Medicare Act. (So too in Weinberger v. Salfi, 422 U. S. 749 (1975),
we did not need to interpret §1395ii, but for a different and more
obvious reason: Salfi was a Social Security case, not a Medicare case, so
§405(h) was directly applicable.) |
| [150] | Our opinion in Ringer was equally silent on the meaning of §1395ii,
this time assuming in passing that it operates as a garden variety incorporating
reference of §405(h),*fn4
an assumption shared by the parties to the case, see Brief for Petitioner
18, 22, and Brief for Respondents 26-29, in Heckler v. Ringer, O. T. 1983,
No. 82-1772. Ringer involved a dispute over reimbursement for a surgical
procedure under Part A of the Act, see 466 U. S., at 608-609, n. 4, so,
unlike in Erika (which involved Part B), it was clear that the individual
plaintiffs could seek judicial review under §1395ff (via §405(g))
after they had presented a claim for benefits to the Secretary and suffered
an unfavorable final decision. But the plaintiffs chose not to follow this
route to review. Instead, they attempted to challenge the Secretary's policy
prohibiting reimbursement for the surgery as violating constitutional due
process and several statutory provisions, invoking general federal-question
jurisdiction.*fn5
As noted, we assumed that §1395ii incorporates §405(h) in the
situation of a preenforcement challenge to the Secretary's Medicare Act
regulations and policies, and held that §405(h)'s third sentence --
"No action against the United States, the [Secretary], or any officer or
employee thereof shall be brought under sections 1331 or 1346 of title 28
to recover on any claim arising under this subchapter" -- expressly precluded
Ringer's suit. Ringer, supra, at 615-616. |
| [151] | B. |
| [152] | We squarely addressed §1395ii for the first time in our 1986 decision
in Bowen v. Michigan Academy of Family Physicians, 476 U. S. 667 (1986).
The Secretary had adopted a regulation that authorized the payment of Part
B benefits in different amounts for similar physicians' services. An association
of family physicians and several individual doctors filed suit to challenge
this regulation. Id., at 668. These plaintiffs asserted no concrete claim
to Part B benefits, for judicial review of such a claim was clearly foreclosed
by the statute as interpreted in Erika; they instead invoked federal-question
jurisdiction. Our |
| [153] | unanimous opinion*fn6
in their favor began by rejecting the Secretary's contention that the provisions
construed in Erika impliedly precluded review not only of benefit amount
determinations under Part B, but also of challenges against the Secretary's
methodologies for determining such amounts. 476 U. S., at 673. The "precisely
drawn" provisions on which we had focused in Erika did not support the Secretary's
proposed inference, as they "simply d[id] not speak to challenges mounted
against the method by which such amounts are to be determined." 476 U. S.,
at 675. |
| [154] | We then turned to the Secretary's argument that §405(h), incorporated
by §1395ii into the Medicare Act, expressly precludes a claimant from
resorting to general federal-question jurisdiction under 28 U. S. C. §1331.
The Secretary contended that under Salfi, supra, at 756-762, and Ringer,
supra, at 614-616, "the third sentence of §405(h) by its terms prevents
any resort to the grant of general federal-question jurisdiction contained
in 28 U. S. C. §1331." 476 U. S., at 679. The plaintiffs responded
that §405(h)'s third sentence precludes use of §1331 only when
Congress has provided specific procedures for judicial review of final agency
action. Ibid. We declined, however, to enter that debate: |
| [155] | "Whichever may be the better reading of Salfi and Ringer, we need not
pass on the meaning of §405(h) in the abstract to resolve this case.
Section 405(h) does not apply on its own terms to Part B of the Medicare
program, but is instead incorporated mutatis mutandis by §1395ii. The
legislative history of both the statute establishing the Medicare program
and the 1972 amendments thereto provides specific evidence of Congress'
intent to foreclose review only of `amount determinations' -- i. e., those
`quite minor matters,' 118 Cong. Rec. 33992 (1972) (remarks of Sen. Bennett),
remitted finally and exclusively to adjudication by private insurance carriers
in a `fair hearing.' By the same token, matters which Congress did not delegate
to private carriers, such as challenges to the validity of the Secretary's
instructions and regulations, are cognizable in courts of law. In the face
of this persuasive evidence of legislative intent, we will not indulge the
Government's assumption that Congress contemplated review by carriers of
`trivial' monetary claims, ibid., but intended no review at all of substantial
statutory and constitutional challenges to the Secretary's administration
of Part B of the Medicare program." Id., at 680 (footnotes omitted). |
| [156] | We accordingly held that the physicians' challenge to the Secretary's
regulation could proceed under general federal-question jurisdiction. |
| [157] | C. |
| [158] | In light of the quoted passage, it is beyond dispute that our holding
in Michigan Academy rested squarely on the meaning of §1395ii. Accord,
ante, at 13. Under Michigan Academy, a case involving an "amount determinatio[n]"
would trigger §1395ii's incorporation of §405(h), and thus bar
federal-question jurisdiction; a "challeng[e] to the validity of the Secretary's
instructions and regulations" would not. 476 U. S., at 680. |
| [159] | This dichotomy does not translate exactly to the instant case, the majority
tells us, because the Secretary's determination to terminate a nursing home's
provider agreement, see 42 U. S. C. §1395cc(b) (1994 ed., and Supp.
III), in no sense resembles the determination of an "amount" of an individual's
benefits under Part A or B, see §1395ff. Therefore, the majority concludes,
Michigan Academy's |
| [160] | interpretation of §1395ii simply does not bear on respondent's challenge
to the Secretary's regulations here. See ante, at 15. |
| [161] | But §1395ii applies to more than just §1395ff, the provision
concerning benefit amounts; it applies, rather, to the entire Medicare Act,
including §1395cc, the provision concerning provider agreements that
is directly at issue here. And we have "stron[g] cause to construe a single
formulation ... the same way each time it is called into play." Ratzlaf
v. United States, 510 U. S. 135, 143 (1994). Accordingly, the interpretation
of §1395ii that we announced in Michigan Academy must have a more general
import than a distinction between Part B benefits determinations, on the
one hand, and Part B methods guiding such determinations, on the other.
Michigan Academy must have established a distinction between, on the one
hand, a dispute over any particularized determination and, on the other
hand, a "challeng[e] to the validity of the Secretary's instructions and
regulations," 476 U. S., at 680.*fn7
The former triggers §1395ii's incorporation of §405(h); the latter
does not. |
| [162] | This case obviously falls into the latter category. Respondent in no way
disputes any particularized determinations, but instead mounts a general
challenge to the Secretary's regulations (and manual) prescribing inspection
and enforcement procedures for the teams that survey participating nursing
homes, 59 Fed. Reg. 56116 (1994), claiming that these were promulgated without
notice and comment, are unconstitutionally vague, contravene the Medicare
Act's requirement of enforcement consistency, and violate due process by
affording insufficient administrative review. Like the Michigan Academy
plaintiffs, who challenged the Secretary's regulation concerning the payment
of benefits for physicians' services, 476 U. S., at 668, respondent may
proceed in district court under general federal-question jurisdiction. |
| [163] | Perhaps recognizing that this result follows straightforwardly from what
our Michigan Academy opinion actually says, the majority creatively recasts
that decision as having established an exception to §1395ii's incorporation
of §405(h): Section 1395ii will not apply "where its application to
a particular category of cases, such as Medicare Part B `methodology' challenges,
would not lead to a channeling of review through the agency, but would mean
no review at all." Ante, at 14. In doing so, the Court confuses the reasoning
(more precisely, one half of the reasoning) of Michigan Academy with the
holding in that case. In Michigan Academy, we undoubtedly relied on the
reality that, if the challenge to the Secretary's regulations were not allowed
to proceed under general federal-question jurisdiction, the Secretary's
administration of Part B benefit amount determinations would be entirely
insulated from judicial review, a result in tension with the " `strong presumption
that Congress did not mean to prohibit all judicial review' of executive
action."*fn8
476 U. S., at 681 (quoting Dunlop v. Bachowski, 421 U. S. 560, 567 (1975)).
But we placed at least equal reliance on the legislative history of the
1972 amendments to the Medicare Act, see 476 U. S., at 680, and our holding
was that challenges to particular determinations would trigger §1395ii,
whereas challenges to the Secretary's instructions and regulations governing
particular determinations would not, ibid.; see supra, at 7. Indeed, in
setting aside the physicians' argument that §405(h) bars general federal-question
jurisdiction only when Congress has provided "specific procedures ... for
judicial review of final action by the Secretary," Michigan Academy, supra,
at 679-680, we expressly declined to decide the case by announcing the "exception"
suggested by the majority. While we might have done so, cf. Mathews v. Eldridge,
424 U. S. 319, 328-330 (1976) (describing limited exception to 42 U. S.
C. §405(g)'s requirement that Secretary's decision be "final" before
judicial review may be sought), we simply did not phrase our holding in
those terms. |
| [164] | II. |
| [165] | To be sure, the reading of Michigan Academy that I would adopt (and that
the Court of Appeals adopted below, 143 F. 3d 1072, 1075-1076 (CA7 1998)),
dictates a different result in the earlier Ringer case. In Ringer, recall,
the respondents were individual Medicare claimants who brought a challenge
to the Secretary's policy regarding payment of Medicare benefits for a specific
surgical procedure. As noted, we (and the parties) simply assumed that §1395ii's
incorporating reference to §405(h) was triggered by such a challenge,
and proceeded directly to decide the case based on §405(h). And yet,
under Michigan Academy's gloss on §1395ii, we would never have reached
§405(h) because §1395ii would not have been activated by such
a "challeng[e] to the validity of the Secretary's ... regulation[n]." 476
U. S., at 680.*fn9 |
| [166] | But it is one thing to conclude that the result in Ringer would have been
different had we applied Michigan Academy's §1395ii analysis to that
case; it is quite another to declare that Michigan Academy effected a sub
silentio overruling of Ringer. Contrary to the majority's representation,
ante, at 14, my approach entails only the former, and therefore does not
offend stare decisis principles as a sub silentio overruling would. As noted,
supra, at 3-4, our opinion in Ringer did not expressly decide the meaning
of §1395ii, assuming instead (as the parties had done) that §1395ii
functions as a garden variety incorporating reference, i.e., that §1395ii
incorporates §405(h) in every case involving the Medicare Act. Accordingly,
"[t]he most that can be said is that the point was in the cas[e] if anyone
had seen fit to raise it. Questions which merely lurk in the record, neither
brought to the attention of the court nor ruled upon, are not to be considered
as having been so decided as to constitute precedents." Webster v. Fall,
266 U. S. 507, 511 (1925). See also, e.g., Lopez v. Monterey County, 525
U. S. 266, 281 (1999) ("[T]his Court is not bound by its prior assumptions");
United States v. L. A. Tucker Truck Lines, Inc., 344 U. S. 33, 38 (1952).
In other words, Michigan Academy could not have overruled Ringer (sub silentio
or otherwise) on a point that Ringer did not decide. The majority opinion
can therefore claim no support from its asserted "consistency with the holdings
of earlier cases such as Ringer." Ante, at 16. Ringer simply does not constitute
a holding on the meaning of §1395ii; or if it does, the majority has
engaged in the very practice it condemns -- a sub silentio overruling (of
Webster v. Fall, supra). |
| [167] | Moreover, the majority's criticism of my approach as declaring a sub silentio
overruling is just as well directed at itself, for Ringer is no less overruled
by the majority's view of Michigan Academy than by my own. According to
the majority, the Michigan Academy "exception" to §1395ii applies where
the aggrieved party "can obtain no review at all unless it can obtain judicial
review in a §1331 action." Ante, at 17. Consider how this test would
apply to Freeman Ringer, one of the four plaintiffs in Ringer. Ringer sought
to challenge the Secretary's policy proscribing reimbursement for a certain
type of surgery (a Part A benefits issue), invoking general federal-question
jurisdiction. He had no concrete reimbursement claim to present, for he
did not possess the financial means to pay for the surgery up front and
await reimbursement. Nor, apparently, could he obtain private financing
for the surgery. See Ringer, 466 U. S., at 620; id., at 637, n. 24 (Stevens,
J., concurring in judgment in part and dissenting in part) ("Ringer would
like nothing more than to give the Secretary [the] opportunity [to rule
on a concrete claim for reimbursement]"); Brief for Petitioners 42, n. 23.
It seems to me that Ringer is the paradigmatic example of a party who "can
obtain no review at all unless [he] can obtain judicial review in a §1331
action," ante, at 17, such that he plainly would qualify for the Michigan
Academy exception to §1395ii as described by the majority. |
| [168] | The majority purports to reaffirm Ringer in toto, but it does so only
by revising that case to hold that Ringer, notwithstanding his own inability
to obtain judicial review without an anticipatory challenge, did not qualify
for the Michigan Academy exception to §1395ii because others in his
class could afford to pursue review by undergoing the surgery and presenting
a concrete claim for reimbursement. See ante, at 19. Setting aside the peculiarity
of interpreting a statute to deny judicial review to the poor with the promise
that the rich will obtain review in their stead,*fn10
the majority's gloss on Ringer ignores the Ringer Court's own description
of its holding. In rejecting plaintiff Ringer's attempt to use §1331,
the Ringer Court did not rely on some notion that Ringer or those similarly
situated to him could as a practical matter seek judicial review through
some means other than §1331; the Court instead reasoned that Ringer's
claim was "essentially one requesting the payment of benefits for [a particular]
surgery, a claim cognizable only under §405(g)." 466 U. S., at 620. |
| [169] | III. |
| [170] | It would overstate matters to say that the foregoing analysis demonstrates
beyond question that respondent may invoke general federal-question jurisdiction.
Any remaining doubt is resolved, however, by the longstanding canon that
"judicial review of executive action `will not be cut off unless there is
persuasive reason to believe that such was the purpose of Congress.' " Gutierrez
de Martinez v. Lamagno, 515 U. S. 417, 424 (1995) (quoting Abbott Laboratories
v. Gardner, 387 U. S. 136, 140 (1967)). See also, e.g., McNary v. Haitian
Refugee Center, Inc., 498 U. S. 479, 496 (1991); Traynor v. Turnage, 485
U. S. 535, 542 (1988); Michigan Academy, 476 U. S., at 670; Johnson v. Robison,
415 U. S. 361, 373-374 (1974); Stark v. Wickard, 321 U. S. 288, 309-310
(1944). |
| [171] | The rationale for this "presumption," Abbott Laboratories, supra, at 140,
is straightforward enough: Our constitutional structure contemplates judicial
review as a check on administrative action that is in disregard of legislative
mandates or constitutional rights. As Chief Justice Marshall explained: |
| [172] | " `It would excite some surprise if, in a government of laws and of principle,
furnished with a department whose appropriate duty it is to decide questions
of right, not only between individuals, but between the government and individuals;
a ministerial officer might, at his discretion, issue this powerful process
... leaving to [the claimant] no remedy, no appeal to the laws of his country,
if he should believe the claim to be unjust. But this anomaly does not exist;
this imputation cannot be cast on the legislature of the United States.'
" United States v. Nourse, 9 Pet. 8, 28-29 (1835) (as quoted in Gutierrez
de Martinez, supra, at 424). |
| [173] | See also S. Breyer, R. Stewart, C. Sunstein, & M. Spitzer, Administrative
Law and Regulatory Policy 832 (4th ed. 1999) (suggesting that "the presumption
of review owes its source to considerations of accountability and legislative
supremacy, ideas embodied in article I, and also to rule of law considerations,
embodied in the due process clause"); Michigan Academy, supra, at 681-682,
n. 12 (noting that interpreting statute to allow judicial review would avoid
the serious constitutional issue that would arise if a judicial forum for
constitutional claims were denied).*fn11 |
| [174] | Contrary to the Secretary's representation, Brief for Petitioners 31-32,
the presumption favors not merely judicial review "at some point," but preenforcement
judicial review. While it is true that the presumption may not be quite
as strong when the question is now-or-later instead of now-or-never, see
Thunder Basin Coal Co. v. Reich, 510 U. S. 200, 207, n. 8, 215, n. 20 (1994),
our cases clearly establish that the presumption applies in the former context.
Indeed, Abbott Laboratories, the "important case ... which marks the recent
era of increased access to judicial review," Breyer, supra, at 831, itself
involved a preenforcement challenge to a regulation. Although the Food,
Drug, and Cosmetic Act (FDCA) did not authorize a preenforcement challenge
to the type of regulation the Secretary had issued, and indeed expressly
enumerated certain other kinds of regulations for which preenforcement review
was available, we explained that these indicia of congressional intent must
be viewed through the lens of the presumption: |
| [175] | "The first question we consider is whether Congress by the [FDCA] intended
to forbid pre-enforcement review of this sort of regulation promulgated
by the Commissioner. The question is phrased in terms of `prohibition' rather
than `authorization' because a survey of our cases shows that judicial review
of a final agency action by an aggrieved person will not be cut off unless
there is persuasive reason to believe that such was the purpose of Congress."
Abbott Laboratories, 387 U. S., at 139-140. |
| [176] | We thus held that the suit could proceed. Id., at 148. |
| [177] | More recently, in Haitian Refugee Center, we reaffirmed the applicability
of the presumption in the context of a pre-enforcement challenge. At issue
in that case was the constitutionality of the Immigration and Naturalization
Service's (INS) procedures for administering an amnesty program for illegal
aliens. Despite the availability of judicial review of these procedures
in the context of statutorily authorized review of orders of exclusion or
deportation, and notwithstanding the statute's express prohibition of judicial
review of an INS "determination respecting an application for adjustment
of status [under the amnesty program]," 8 U. S. C. §1160(e)(1), we
held that these factors did not suffice to trump the "strong presumption
in favor of judicial review of administrative action." Haitian Refugee Center,
498 U. S., at 498. |
| [178] | The majority declines to employ the presumption in favor of preenforcement
review to resolve the ambiguity in §1395ii; instead, it concocts a
presumption against preenforcement review, stating that its holding is "consisten[t]
with the distinction that this Court has often drawn between a total preclusion
of review and postponement of review." Ante, at 16 (citing Salfi, 422 U.
S., at 762; Thunder Basin Coal, supra, at 207, n. 8; Haitian Regugee Center,
supra, at 496-499). But Thunder Basin Coal, as noted, supra, at 14, teaches
only that the presumption is not as strong when the problem is one of delayed
judicial review rather than complete denial of judicial review -- it does
not establish that the presumption lacks any force in the former context.
And Haitian Refugee Center directly supports the applicability of the presumption
in favor of preenforcement review; we there invoked the presumption even
though the plaintiffs had a postenforcement review option -- voluntarily
surrendering themselves for deportation and availing themselves of the statutorily
authorized judicial review of an order of exclusion or deportation. Haitian
Refugee Center, supra, at 496. Only Salfi provides the majority with modest
support insofar as it acknowledged (and distinguished) just the presumption
against the complete denial of judicial review, 422 U. S., at 762, omitting
mention of the presumption against delayed judicial review. But this omission
is readily explained: Presentment of a Social Security benefits claim for
purposes of 42 U. S. C. §405(g) is accomplished by the near-costless
act of filing an application for benefits, to be contrasted with the extremely
burdensome presentment requirement facing the aliens in Haitian Refugee
Center or the named plaintiff in Ringer. The only significant hardship facing
the claimants in Salfi arose from the possibility that a lengthy administrative
review process would postpone a judicial decision ordering the Secretary
to pay the disputed benefits; but the Court took care of that problem by
leniently construing §405(g)'s requirement of a "final" agency decision
and by allowing the Secretary to waive entirely §405(g)'s requirement
that decision be made "after a hearing." At bottom, then, the majority cannot
demonstrate why the presumption in favor of preenforcement review, which
dates at least from Abbott Laboratories, should not be invoked to resolve
the debate between our conflicting readings of §1395ii. |
| [179] | There is a practical reason why we employ the presumption not only to
questions of whether judicial review is available, but also to questions
of when judicial review is available. Delayed review -- that is, a requirement
that a regulated entity disobey the regulation, suffer an enforcement proceeding
by the agency, and only then seek judicial review -- may mean no review
at all. For when the costs of "presenting" a claim via the delayed review
route exceed the costs of simply complying with the regulation, the regulated
entity will buckle under and comply, even when the regulation is plainly
invalid. See Seidenfeld, Playing Games with the Timing of Judicial Review,
58 Ohio St. L. J. 85, 104 (1997). And we can expect that this consequence
will often flow from an interpretation of an ambiguous statute to bar preenforcement
review. In Haitian Refugee Center, for example, the aliens' "postenforcement"
review option for asserting their challenge to the agency's procedures required
the aliens to voluntarily surrender themselves for deportation, suffer an
order of deportation, and seek judicial review of that order in the court
of appeals. These costs of presentment, we explained, were "[q]uite obviously
... tantamount to a complete denial of judicial review for most undocumented
aliens." 498 U. S., at 496-497. |
| [180] | A similar predicament faces the nursing homes represented by respondent
in the instant case, who contend that the Secretary's regulations (and manual)
governing enforcement of substantive standards are unlawful in various respects.
The nursing homes' "postenforcement" review route is delineated by 42 U.
S. C. §1395cc(h)(1), which provides that "an institution or agency
dissatisfied ... with a determination described in subsection (b)(2) of
this section shall be entitled to a hearing thereon by the Secretary (after
reasonable notice) to the same extent as is provided in section 405(b) of
this title, and to judicial review of the Secretary's final decision after
such hearing as is provided in section 405(g) of this title." While the
meaning of "determination" in the referenced 42 U. S. C. §1395cc(b)(2)
(1994 ed., Supp. III) is not entirely free from doubt, the Secretary has
interpreted these provisions to mean that administrative and judicial review
is afforded for "any determination that a provider has failed to comply
substantially with the statute, agreements, or regulations whether termination
or `some other remedy is imposed.' " Ante, at 17 (quoting Reply Brief for
Petitioners 14 (emphasis in original)). Still, even under the Secretary's
reading, an inspection team's assessment of a deficiency (for noncompliance)
against the nursing home does not suffice to trigger administrative and
judicial review under §1395cc(h). Presentment of a claim via §1395cc(h)
requires the nursing home not merely to expose itself to an assessment of
a deficiency by an inspection team, but also to forbear correction of the
deficiency until the Secretary (or her state designees) impose a remedy. |
| [181] | Respondent and its amici advance several plausible reasons why such forbearance
will prove costly -- indeed, costly enough that compliance with the challenged
regulations and manual is the more rational option. For one, nursing homes
face the prospect of termination -- the most severe of remedies -- simply
by virtue of failing to submit a voluntary plan of correction and correct
the deficiencies. See 42 CFR §488.456(b)(1) (1998). The Secretary's
only response is that terminations are rarely imposed in fact, and certainly
are not imposed where the provider has postponed correction of its deficiencies
in order to preserve its appeal rights. But any such leniency is solely
a matter of grace by the Secretary, see Tr. of Oral Arg. 31, and provides
little comfort to a nursing facility pondering the §1395cc(h) route
to judicial review. And exposure to the termination remedy is not the only
consequence faced by a nursing home that forestalls correction of its deficiencies.
The Secretary also may impose civil monetary penalties, which accrue for
each day of noncompliance, 42 CFR §§488.430, 488.440(b) (1998),
and thus quite plainly stand as a calibrated deterrent to the forbearance
strategy. Cf. Ex parte Young, 209 U. S. 123, 148 (1908) ("[T]o impose upon
a party interested the burden of obtaining a judicial decision ... only
upon the condition that if unsuccessful he must suffer imprisonment and
pay fines ... is, in effect, to close up all approaches to the courts").*fn12
Other costs of the forbearance strategy are less tangible, but potentially
as significant. For example, a finding of a deficiency at a nursing facility
-- which may well rest on unbalanced or inaccurate data -- is posted in
a place easily accessible to residents, 42 CFR §483.10(g)(1) (1998),
disclosed to the public, 42 U. S. C. §1395i-3(g)(5)(A), and posted
on the Health Care Finance Authority's Internet website, Reply Brief for
Petitioners 20, n. 20.*fn13
Such negative publicity, which occurs before the nursing home may avail
itself of administrative or judicial review via §1395cc(h), is likely
to result in substantial reputational harm. See Gardner v. Toilet Goods
Assn., Inc., 387 U. S. 167, 172 (1967) ("Respondents note the importance
of public good will in their industry, and not without reason fear the disastrous
impact of an announcement that their cosmetics have been seized as `adulterated'
"). |
| [182] | I recount these allegations of hardship to respondent's members not because
they inform any case-by-case application of the presumption in favor of
preenforcement review, but rather because such concerns motivate the presumption
in a general sense. A case-by-case inquiry into hardship is accommodated
instead by ripeness doctrine, which "evaluate[s] both the fitness of the
issues for judicial decision and the hardship to the parties of withholding
court consideration." Abbott Laboratories, 387 U. S., at 149 (emphasis added).
I read our cases to establish just this sort of analysis: (1) in light of
the presumption, construe an ambiguous statute in favor of preenforcement
review; (2) apply ripeness doctrine to determine whether the suit should
be entertained. Thus, in Abbott Laboratories and its two companion cases,
we construed an ambiguous statute to permit preenforcement review, see id.,
at 148; Gardner v. Toilet Goods Assn. supra, at 168; Toilet Goods Assn.,
Inc. v. Gardner, 387 U. S. 158, 160 (1967), but we then proceeded to hold
that only the suits in the first two of these cases were ripe, Abbott Laboratories,
supra, at 156; Gardner v. Toilet Goods Assn., supra, at 170; Toilet Goods
Assn. v. Gardner, supra, at 160-161. See also Reno v. Catholic Social Services,
Inc., 509 U. S. 43, 56-66 (1993) (similar). In line with this mode of analysis,
the court below, after concluding that the Medicare Act does not preclude
general federal-question jurisdiction over a preenforcement challenge to
the Secretary's regulations, held that respondent's APA notice-and-comment
challenge was ripe but that its constitutional vagueness claim was not.
143 F. 3d, at 1076-1077. |
| [183] | While I express no view on the proper application of ripeness doctrine
to respondent's claims,*fn14
I am confident that this method of analysis enjoys substantially more support
in our cases than does the majority's approach, which prescribes a case-by-case
hardship inquiry at the threshold stage of determining whether preenforcement
review has been precluded by statute. See ante, at 17 (holding that §1395ii
does not incorporate §405(h) where the aggrieved party "can obtain
no review at all unless it can obtain judicial review in a §1331 action").
While the majority's variation would be harmless if its hardship test were
no more stringent than the hardship prong of ordinary ripeness doctrine,
I presume its test is more exacting -- otherwise the majority opinion is
no more than a well-disguised application of ripeness doctrine to the facts
of this case.*fn15
At bottom, then, the majority superimposes a more burdensome hardship test
on ordinary ripeness doctrine for aggrieved persons who seek to bring a
preenforcement challenge to the Secretary's regulations under the Medicare
Act.*fn16 |
| [184] | *** |
| [185] | Instead, I would hold that §1395ii, as interpreted by Michigan Academy,
does not in this case incorporate §405(h)'s preclusion of federal-question
jurisdiction, especially in light of the presumption in favor of preenforcement
review. I respectfully dissent. |
|
|
|
| Opinion Footnotes | |
|
|
|
| [186] | *fn1 Section
1395ii provides in relevant part that the provisions of §405(h) "shall
also apply with respect to [the Medicare Act] to the same extent as they
are applicable with respect to [the Social Security Act]." |
| [187] | *fn2 Part
B of the Medicare Act provides voluntary supplemental insurance coverage
to eligible individuals for certain physician charges and medical services
that are not covered by Part A. Individuals' Part B benefits claims are
routinely assigned to providers of services, who then seek reimbursement. |
| [188] | *fn3 Our
decision in Erika illustrates the longstanding principle that a statute
whose provisions are finely wrought may support the preclusion of judicial
review, even though that preclusion is only by negative implication. See,
e.g., United States v. Fausto, 484 U. S. 439, 452 (1988); Block v. Community
Nutrition Institute, 467 U. S. 340, 351 (1984); Switchmen v. National Mediation
Bd., 320 U. S. 297, 305-306 (1943). |
| [189] | *fn4 See
Heckler v. Ringer, 466 U. S. 602, 614-615 (1984) ("The third sentence of
42 U. S. C. §405(h), made applicable to the Medicare Act by 42 U. S.
C. §1395ii, provides that §405(g), to the exclusion of 28 U. S.
C. §1331, is the sole avenue for judicial review for all `claim[s]
arising under' the Medicare Act" (alteration in original)). |
| [190] | *fn5 The
plaintiffs also asserted, to no avail, that the District Court had jurisdiction
under 28 U. S. C. §1361 (mandamus) and 42 U. S. C. §1395ff (1982
ed., and Supp. II) (judicial review of Part A benefit amount determinations).
See Ringer, supra, at 617-618. |
| [191] | *fn6 Then-Justice
Rehnquist did not participate. |
| [192] | *fn7 For
this reason, it is beside the point that Congress amended §1395ff after
Michigan Academy to make express provision for administrative and judicial
review of Part B benefits claims. See Pub. L. 99-509, §9341(a)(1)(B),
100 Stat. 2037. Congress has not substantively amended §1395ii since
Michigan Academy, and so Michigan Academy's gloss on §1395ii deserves
as much stare decisis respect today as it ever has. |
| [193] | *fn8 The
majority opinion may enjoy the "virtu[e] of consistency with Michigan Academy's
actual language," ante, at 16 -- but only some of the language, and not
the most important part. As I explain in the text, the language that the
majority opinion purports to track merely sets forth one of the two rationales
for the holding in Michigan Academy. My reading of Michigan Academy, not
the majority's, is consistent with the language in Michigan Academy setting
forth that case's holding: §1395ii "foreclose[s] review only of `amount
determinations,' ... [not] challenges to the validity of the Secretary's
instructions and regulations." 476 U. S., at 680. |
| [194] | *fn9 While
I readily agree with the majority's observation that my reading of Michigan
Academy implies a different result in Ringer, I fail to comprehend the majority's
assertion that my view of Michigan Academy also implies a different result
in Weinberger v. Salfi, 422 U. S. 749 (1975). See ante, at 14. As noted,
supra, at 3, Salfi was a Social Security case, and so §405(h) applied
of its own force. Our post-Michigan Academy cases are entirely consistent
with my reading of Michigan Academy. For example, in Your Home Visiting
Nurse Services, Inc. v. Shalala, 525 U. S. 449 (1999), the challenge was
directed to a particular determination of reimbursement benefits, and we
held that §405(h), as incorporated into the Medicare Act by §1395ii,
precluded resort to general federal-question jurisdiction. |
| [195] | *fn10
The majority attempts to soften the blow by explaining that "individual
hardship may be mitigated in a different way, namely, through excusing a
number of the steps in the agency process, though not the step of presentment
of the matter to the agency." Ante, at 19 (emphasis added). But the italicized
words show why the majority's concession provides cold comfort to a plaintiff
like Ringer -- or, arguably, the nursing homes represented by respondent
here, see infra, at 18-19 -- who cannot afford to present a concrete claim
to the agency, and thus can obtain neither administrative nor judicial review. |
| [196] | *fn11
We have observed that Congress "reinforced" the presumption by enacting
the Administrative Procedure Act (APA), which "embodies the basic presumption
of judicial review to one `suffering legal wrong because of agency action,
or adversely affected or aggrieved by agency action within the meaning of
a relevant statute.' " Abbott Laboratories v. Gardner, 387 U. S. 136, 140
(1967) (quoting 5 U. S. C. §702 (1964 ed., Supp. III)). |
| [197] | *fn12
In Thunder Basin Coal Co. v. Reich, 510 U. S. 200 (1994), the aggrieved
mine operator was similarly subject to civil penalties ($5,000) for each
day of noncompliance with statutory provisions, which would become final
and payable after review by the agency and the appropriate court of appeals.
Id., at 204, n. 4, 218. But, unlike the nursing homes at issue here, the
aggrieved mine operator apparently had the option of complying and then
bringing a judicial challenge. See id., at 221 (Scalia, J., concurring in
part and concurring in judgment). |
| [198] | *fn13
While the Secretary represents, Reply Brief for Petitioners 20, n. 20, and
the Court accepts, ante, at 19, that a deficient nursing home may post a
response on the website, respondent's amici American Health Care Association
et al. assert that the website does not accommodate provider comments, but
only lists the date a facility has corrected a deficiency, Brief for American
Health Care Association et al. as Amici Curiae 18. |
| [199] | *fn14
The Secretary did not seek review of the Court of Appeals' holding that
respondent's APA notice-and-comment challenge is ripe, Pet. for Cert. i,
and this Court denied respondent's cross-petition for certiorari seeking
review of the Court of Appeals' holding that respondent's vagueness challenge
is not ripe, 526 U. S. 1067 (1999). |
| [200] | *fn15
The majority acknowledges that its hardship test is more burdensome than
the hardship prong of ripeness doctrine in at least one respect. We are
told that the relevant hardship is not that endured by the "individual plaintiff,"
but rather that confronted by the "class" of persons similarly situated
to the individual plaintiff. Ante, at 18; see infra, at 12. |
| [201] | *fn16
The majority betrays its misunderstanding of the relationship between the
presumption in favor of preenforcement review and ripeness doctrine when
it says that "any ... presumption [in favor of preenforcement review] must
be far weaker than a presumption against preclusion of all review in light
of the traditional ripeness doctrine, which often requires initial presentation
of a claim to an agency." Ante, at 16. I do not dispute that respondent
must demonstrate that its claims are ripe before the District Court may
entertain respondent's preenforcement challenge. My point is only that respondent
should be permitted to make its ripeness argument and to have that argument
assessed according to traditional ripeness doctrine, rather than facing
statutory preclusion of review by (inevitably) failing the majority's "super-hardship"
test. As I explained, supra, at 20, our cases establish a two-step analysis:
(1) in light of the presumption in favor of preenforcement review, construe
an ambiguous statute to allow preenforcement review; (2) apply ripeness
doctrine to determine whether the suit should be entertained. |
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